Cameron is pitching Britain as the pre-eminent Western gateway for investment from China, though the warmth of the reception for Xi has raised some eyebrows with allies and drawn criticism that London is ignoring China's human rights record.
Protests on the street against the Communist leader have been small so far, despite activists accusing Cameron of courting Chinese money while brushing aside criticism of a crackdown on civil liberties since Xi came to power in 2012.
British officials and business leaders say the rise of China is impossible to ignore: China's economy is four times the size of Britain's.
Cameron wants to make London, the biggest global foreign exchange center, into the dominant Western hub for trading, clearing and settlement of renminbi.
When a BBC reporter asked Xi at a briefing whether Britain should be pleased to do business with an undemocratic country with a troubled relationship with human rights, Cameron said a strong commercial relationship was important.
"The stronger our relationship, the more able we are to have the necessary and frank discussions about other issues," Cameron said, adding he had raised the oversupply of Chinese steel after over 4,000 jobs were thrown into jeopardy at steel plants across Britain in recent weeks.
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Xi said China had taken steps to reduce iron and steel capacity and that China attached "great importance" to the protection of human rights.
"Looking around the world, there is always room for improvement," Xi said of human rights. He later told a business audience that there would be no hard landing for China's economy.
"The Chinese economy will maintain its strong momentum," Xi said. "There will be no hard landing."
China will take a 6-billion-pound stake in EDF's Hinkley Point project in the southwestern English county of Somerset, due to be the first new nuclear plant to be built in the European Union since Japan's Fukushima disaster in 2011.
The Chinese investment, agreed in principle in October 2013, breathes life into a British plan to replace around a quarter of its electricity generating capacity over the next decade. It offers China a way to showcase its nuclear technology as part of its pitch as a global exporter of quality infrastructure.
No overall figure was given for the Chinese nuclear investment. Britain said before the visit that a total of 30 billion pounds' worth of contracts would be clinched, though Cameron upped the figure to 40 billion on Thursday.